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Money for nothing? The pros and cons of a ‘basic income’

The recent news that the Finnish Government will not be expanding its trial which provided 2,000 unemployed people with a state-supplied basic income has sparked fresh debate on the topic.

A basic income is defined as ‘a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement’. It is supplementary to any other support someone might receive such as unemployment, child or housing benefit.

Dr Charles Barthold, Lecturer in People Management at OUBS, discussed the potential advantages and drawbacks in ‘Modern Empowerment Today: The Possibilities of a Citizen’s Basic Income’, one of three presentations at a masterclass organised by OUBS at the Crowne Plaza in The City on Wednesday 2 May 2018.

Charles discusses the issue:

“The important criteria of a basic income are that it is an ‘unconditional’ income to every individual in a particular country via a repetitive cash payment and is universal (so not means tested). The idea is to democratise society with an intention to be inclusive as everyone becomes ‘part of society’ regardless of gender, class or poverty. It could empower us all and provide more choices for people such as offering the opportunity for couples to both work part-time, for example. It would be simple to administer and much easier than the complex current means tested system which is subject to both fraud and errors, although some people would still be receiving other benefits on top of this basic income.

“There is an expectation that innovation will destroy and create jobs and that the current level of employment will continue to increase. Basic income is an instrument to smooth the transition from one job to another but with individual responsibility to look for the next job and to be employable. It’s meant to provide a minimum income as you transition to another job – perhaps by learning new skills through going back to education – as a response to automation which will see some repetitive, low-skilled jobs replaced and a move towards other low-skilled jobs that are not repeatable such as cleaners and care workers.

“Usually these experiments are very limited in both the amount of people involved and the time it happens for. Despite the Finnish experiment not being continued beyond the end of the year, people have continued to work and stress levels decreased during these trials. I don’t see the basic income as a silver bullet as it’s difficult to provide money to people without any responsibility – according to the current world view – but it could offer more freedom and choice through education and entrepreneurship.”

‘The future of work 4.0: Disruptive technologies, opportunity or threat?’ Business Perspectives masterclass also featured presentations on the fourth industrial revolution and regulating blockchain led by Lecturer in Law Robert Herian from The Open University Law School, as well as a discussion on some of the opportunities and challenges posed by potential economic ‘disruptions’.